Other Economic Key Performance Indicators
Beyond the traditional total cost of ownership, the shift from capital to operational expenses, and ROI, TABLE 16-1 describes several key performance indicators that you should consider with respect to a cloud deployment.
TABLE 16-1 Additional key performance indicators to consider with a cloud deployment.
| Metric/Indicator | Measure |
|---|---|
| System availability | Through system redundancy and colocation, cloud-based service providers typically provide 99.9 percent uptime and system availability. Because the cloud-service providers maintain operating system and support software, companies normally experience little downtime for system patch or version upgrades. Most cloud-service providers will guarantee system availability as part of their service level agreement. |
| Processor utilization | Because cloud-based providers can scale processors on demand, a company does not have to deploy a large number of processors to meet potential demand. Instead, the company can estimate initial demand and then scale up or down accordingly and dynamically to drive a more efficient processor utilization. |
| Time-of-day utilization | Many applications experience spikes during specific times of the day. For example, a human-relations solution will normally experience traffic during business hours and then little traffic during off times. Because cloud-service providers can dynamically scale resources to meet user demand, the solutions can scale up or down processor power as needed throughout the day. |
| Resource demand/utilization (RAM, disk database) | Many companies will find that their resource demand models their time-of-day utilization. Again, a cloud-service provider may be able to scale resources to best align user demand with costs. |
| Time to market | Most companies can instantly turn on a cloud-service solution, without the cost and time involved in establishing a data center (small or large), acquiring, installing, and testing hardware and software, and hiring system administrators. |
| Opportunity costs | An opportunity cost is an activity’s potential that a company must forgo because of selecting a different alternative. For example, if a company invests in an on-premise data center, the company may have to forgo an advertising and marketing initiative that may have driven revenues. |
| User experience | Hiring, onboarding, and training skill IT employees is often an expensive investment. Most cloud-based service providers have an experienced team of administrators and security personnel. |
| Market disruption | Being first to market can have disruptive benefits. By utilizing cloud-based resources, a company may become more nimble and faster to market than a company that instead integrates an on-premise data center. |
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